to earnings but we cannot say what it is right now. there is this information gap where we really have no idea how bad it will be, how long it will last. one number i've been keeping a we areye on here, slightly lower on the year. it looked like maybe it would stop there. romaine: with this close we are down about .1% on the s&p 500 for the year. we were up a couple weeks ago, 3%, 4%. dow down 2% on the year. nasdaq still holding onto gains roughlyyear, up 2.7% after the losses today. scarlet: the market cap dipped below $1 trillion once again. some of the leaders in the stocks, arely tech the ones hardest hit today. in the past couple weeks we have

been seeing a lot of industrials, energy companies, airlines, travel companies taking the brunt of the selling. now it has spread to the leaders. 4%, then a little under worst day since october 28. i think that is one powell said neutral. all down more than 4%, basically the big laggards today. that is what you get. scarlet: the dow and s&p negative on the year. nasdaq still holding onto a gain of 2.8%. let's check in with our market reporters to say what they were monitoring. abigail, get us started. abigail: i am thinking about the selloff we had on this day and putting it into the context of a chart we have looked at frequently, because it feels like it is from out of nowhere, but many the surface there have been indications we could see this action. this chart goes back to the beginning of the coronavirus outbreak as we were reporting on it. a little more than a month ago.

in yellow is crude oil and copper is in pink. both of those commodities down about 10%. at the lowest crude oil was down 15%. china is the world's largest user of natural resources. when you had a divergence between commodities and the s&p 500 in white, it typically suggests volatility could be ahead, as happened today. also concerning is the fact the emerging market in the dow down sharply. what is really interesting, today on the selloff we had the s&p 500 now over this time period down 2.9%. the csi 300 and china down just .5%. it seems to be more priced in in chinese stocks at this point. but the big winners bonds, of about 3% since the bond -- coronavirus outbreak. kriti: as you know the coronavirus has spread to more than 30 countries so far, and fears have oil sliding today. wti futures are down for the third straight day. and they are down more than 15%

so far this year. td securities says if the spread of the coronavirus becomes a global pandemic, the impact on oil demand could be far greater than what has happened so far. kriti: from the commodities markets to the credit markets, i'm watching the high-yield debt space. the u.s. ten-year hitting the record low, the most since 2016. that is crucial for the high-yield debt market because we are also seeing yields rise as investors pull their funds out of this lower quality debt. take a look at this chart of the spread for the high-yield market with the s&p 500, really the leading indicator. the spread widening as we see investors pull their money out of the eps as well. both seeing outflows over the past few days. that could be a leading indicator for stocks, and by this indication, stocks have some room to fall. joe: thank you markets team.

breaking news here on the deals front. confirming a deal to buy credit karma for $7.1 billion in cash and stock. of course credit karma allows people to do a range of financial things online. checking credit scores and helping to move your card balances to other lower things. another deal, we have been seeing a bunch of these. fintech, online tech deals by various legacy players. after hours intuit rising a little, although bear in mind this was reported earlier. now it is official. $7.1 billion for credit karma. still with us is michael regan and kristen bitterly. kristen, i want to go to you. volatility or of selloffs we see in the market, people expect the fed will come

in and there will be some sort of backstop, for stimulus or something. is it less effective in a situation in which a weakness is really not stemming from anything financial and there is just so much uncertainty about the degree of damage this will due to economies around the world? kristen: right now when we look at what the market is pricing, it is pricing potentially three cuts. we will see at the end of the day. in terms of the fed responding to that, we do not know. we do not know yet. so, they have definitely stayed on the sidelines, said they are willing to step in if anything derails economic growth, then we could see the fed acting. but our base case right now as we will not see any cuts. romaine: what does a fed cut do anyway? a lot of people have said the fed doesn't do anything. we have heard from some members saying they are ready to respond. but the general idea here is a fed cut is not really going to change sentiment around something.

the one thing so peculiar about this market as we look at the global bond market, it is a bigger anomaly than what we have seen in equities. f1 keeps talking about equities being at all-time highs. the global bond market, you have outside the u.s., 53% of the global bond market investment grade is negative. we have an average yield at .6%. it is wild in terms of the low yields that we are seeing. -- are you going to do anything by having that fed cut in terms of an impact on the dollar? no, because u.s. treasuries are honestly the only game in town right now. scarlet: i want to jump in because we have other corporate news. its full-yearng earnings outlook and also saying it plans to buy that $15 billion of its stock. the stock is higher in after hours training. in addition, they will reach out to xerox to explore, nation options, which i am sure -- to explore combination options.

hp shares moving higher after boosting before year earnings forecast and on plans to buy back $15 billion of its own stock. mike, i want to bring you back into this conversation. does the selling today look disorderly or panicky? how do we determine whether something -- joe: my answer was not good enough? [laughter] scarlet: the more the merrier. michael: not necessarily panic. you didn't see many circuit breakers going off. overnight i was wondering if it would get bad enough to trigger these -- trigger the circuit breakers on futures. it never got that bad and it kind of went down and stayed down. history would suggest that at times like this, we could see a swing the other way in the coming days, and another swing back down. i think we are in for a few wild days after this. i would be very surprised to see a quiet day tomorrow. i would not dare predict if it would go up or down, but not a

big move one or the other. scarlet: what kind of comments or questions are you getting from clients? kristen: i agree with your comments about it seeming rather orderly. this is something that definitely was a selloff across the board. it was something we saw a big dip at the beginning. the question right now is if you are someone who is fully invested, what do you do? is this a moment to all of a sudden sellout? we do not believe so. if you want to do anything and you are fully invested -- and by that i mean you have a diversified portfolio. that is what diversification gives you in these kind of markets. any kind of shifts, sure, you could shift slightly into gold, raise portfolio quality, which is something we have been doing from the beginning of the year, given how late in the cycle we are. joe: in terms of what we are watching next, are we just in this pattern where, because of the extreme degree of uncertainty, it is going to be hard for anyone to feel comfortable buying the dip? no one really knows what tomorrow is going to bring, but

it just feels like at this point, and he developments over the weekend, there are some any questions about where this is going. michael: i look at the balances in money market mutual funds. they are like $3.6 trillion. as a percentage of u.s. market cap it is not huge, but that is a lot of money in money market funds. so there are people there whom missed a lot of last year's rally and would like to get in. they would just need kind of a green light to get in. i think people will be looking at the italy coronavirus numbers, the career numbers, hoping for some inflection point that shows the worst is over. kristen: in terms of actual slows into equities, we saw slows into the bond markets and money market funds, but there will be a point in time -- let's say this continues. there is a point where you look at the differential between what you are getting any money market fund versus the yields on some really high quality names. and that will be an inflection

point where you see people come back into equity markets. don't have any fear that more people will move into cash? kristen: absolutely we could see more people moving into cash. that is what we saw today in terms of all of the flows. that could continue until we get more certainty around what is happening. one of the things that i think is wonderful for markets like this is all of those strategies that are in between simply holding or selling or sitting on the sidelines and getting in, a lot of options strategies are a way to play being right in between. so for people who are fully invested, it is not too late to hedge. there is a lot of really interesting strategies that can protect you against a further decline. if you are sitting on the sidelines, these spikes in volatility create a beautiful opportunity to sell that volatility, and then build %,sition at levels 5%, 10 and you are getting double digit wields to wait. romaine: we are going to have to

leave it there. an interesting way to end it. our thanks to kristen bitterly and michael regan. that does it for the closing bell. would you miss is coming up next. from new york,this is bloomberg. ♪

romaine: live from bloomberg world headquarters in new york. here's a snapshot of how u.s. stocks closed today.

u.s. stocks having their worst day in more than a year. the dow and s&p erasing their gains for the year. coronavirus cases rippling well beyond china's border. many investors seeking out safe havens. and with the potential for a broad slowdown in the world economy, the question is whether we can really expect monetary policy to save the day. and europe's weak link. concern that the spread of the coronavirus make tip the country back into the danger zone. now, some fears right are calling for the federal reserve to cut interest rates. that includes narayana kocherlakota, the former president of the minneapolis fed. he is arguing for an immediate mid meeting rate cut. narayana kocherlakota is now a professor of economics at the university of rochester and is a bloomberg opinion columnist, joining us now on the telephone. thank you for joining us. can you give us the base case

here, not only why the fed should cut, but why they should cut before their next scheduled meeting in mid-march? isayana: so, the base case that you begin with the observation that when the fed is close to being out of tools, it should try to keep the economy as healthy as it possibly can at all points in time. low mutual have such real rates, low baseline interest rates, you have to be hypersensitive to downside risk. what are those downside risks? i think we saw some of that manifest itself today in market. basically the coronavirus is a fear factor, a shock for the economy. will lead to a big downturn in global demand. that would lead to an appreciation of the dollar, dragging the fed further from its appreciation goals. further away from my baseline,

it could have a negative effect on the u.s. economy itself, pushing up unemployment. so the baseline case is simply more of a risk of a shock, and shock, anduld respond to the fed should respond to that. joe: is the premise of a cut that, ok, because of these fears, because of this risk that is emerging, that the fed rate should be 25 basis points lower, or is it the idea that by doing , by cutting 25ut basis points now before the data starts to show up, that the fed is telling the market and the economy we are here to play, we are here to take it seriously, and this is just the beginning, and if more is called for, you know we are here? narayana: i view it as -- i answer is yes. so, i think you are playing a role to try and buttress the economy, cut by 25 or even as much as 50. but really, what you see in markets is a pricing in of a

fear that central banks are going to face shocks if they are either -- that they are either unwilling or unable to deal with. my moving right now, the fed would be singling, no, you don't have to worry about this federal reserve at least. scarlet: but this is not a liquidity issue, it is not a financial issue. this is something more. a rate cut does not solve the problem at the root of it. we have seen how the perceived risk of recession has increased and is rising, but it has nothing to do with the cost of money. would fiscal policy be a more effective response than monetary policy? narayana: yeah. i think that is a great point. monetary policy typically is not about treating the root cause of what is going on. it's really trying to treat the symptoms of lower prices and lower employment. and by stimulating, by cutting interest rates, you are helping to offset a shock that is coming

from, obviously something medical that the fed has no ability to directly treat. would fiscal policy be helpful? last week in a conference hosted in chicago, fed policy leaders were talking about, well, we do not have a lot of tools in the toolkit, maybe congress should be ready to move. and i think that that's something that -- maybe not for this shock, but going down the road i would like to see congress be more in a position to pick up the slack and monetary policy. joe: it seems to many people that there's an inherent conservatism -- and i do not mean politically per se, but not eager to take very big risks, wanting to see clear evidence that the data requires a cut before they are willing to cut. not rocking the boat too much.

you were not long ago were president of the minneapolis fed. culturally, in that meeting room, is there the appetite, or their willingness to do something bold and unexpected, cut, orid-meeting rate is that just very difficult given how the central bank operates? narayana: that is a great question. my own feeling is, this is something i called for that the fed should do. it is very unlikely to do it. partly because of culture. they worry a lot, suppose we cut rates and then two months go by and we have to raise them back up and people will criticize us, that we made a mistake. so they really prefer to have clear evidence before they move. with that said, i want to applaud the fed for moving last year. i think they moved in response to increased risks to the world economy.

i am optimistic that even if they do not make a mid-meeting move, they might move at their next meeting. scarlet: they are going to look at the data. they capes -- they keep saying they are data-dependent. we have the market purchasing managers index last week falling to 49.6, which really concerned a lot of investors. this is not usually a market-moving data point, but we are looking at anything and everything we can get our hands on. what data point will you be looking at carefully to determine whether this has tipped us closer to recession? narayana: so, you know, i look at the same data as everyone else. i will be looking at payrolls when they come out. i think we are seeing some interesting movements in joel's data. interesting and bad news in that data. my baseline outlook remains very optimistic. it's simply that when you are so considerations have

to be much more paramount in driving policy. so you do not just look at the data, you look at the risks in the data. romaine: when we talk about the signaling that comes out of the fed and the way the market, and really a lot of participants in the economy interpret it, let's say the fed did not cut rates in march or even before then. let's say you started to hear more serious discussion about an expansion of qe, or restarting of qe, particularly on the longer end of the curve. does that send the wrong message to the market with regards to either the health of the economy, and really i guess, the health of the markets themselves? narayana: you know, it is like when you get on a plane and they tell you that we have got all these stopgap measures in case things go awry. we do not all immediately rush out of the plane. romaine: but when the thing drops down from the ceiling,

everyone panics. fed has: yes, but the to be in a position of communicating ahead of time, being clear that they are always on a watch for risk and willing to respond aggressively to risk. then i think what becomes clear is making a move means you are worried about a risk and not necessarily that risk itself has had the economy already. i do not think -- again, i do think that market participants are aware that the fed does not see a lot of information, especially about the course of the coronavirus that is not available to the public. so, i do not think that is a major concern. it is really the fed should be concerned that the market, their will to act aggressively enough when risks materialize. joe: something that strikes me, the stock market is something like 5% off of its all-time

high, still incredibly elevated over the last year. we get this little dip lasting about 1.5 weeks and suddenly people are talking about the need to cut. are we out of place in the economy where financial assets relative to the side of the economy are just so big that there is almost no stomach to tolerate the decline of financial assets because of the effect that has in consumer confidence, business investing, and so forth? narayana: to be clear, i wrote -- i am not that fast of a writer so i wrote my drafts before i knew the markets. what i was suggesting for the fed is not based on what markets are doing, and i do not think the fed should be responding that way. think we can tolerate declines that we saw today. aat i worry about more is pursuit of safe haven driving up the dollar, and then that makes

it harder for the fed to meet its inflation target. and then you start to lose credibility on that. i think that is the risk. the fed has been skirting with that danger for five years or even longer. and that is the risk that i view as being really more material out of this particular shock. romaine: professor, great to get your thoughts. narayana kocherlakota, former president of the federal reserve bank of minneapolis. we want to bring you some breaking news. palo alto networks down about 14% after hours. the big cybersecurity software company, just to go through the revenue. $816 million. they are guiding down 3q revenue. their estimate was $872. estimate coming down full-year. this is bloomberg. ♪ is is bloomberg. ♪

scarlet: let's get a quick check of the latest business flash headlines. targeting alternative asset managers again. dial wants to raise at least $9 billion to buy minority stakes. the firm has done this four times before. they want to invest in future funds or new strategy. more problems for wework. resignedcutive has during an investigation into inappropriate workplace conduct. a romanticedly had relationship with a member of his team. that is your business flash update. ♪

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the best tv experience is the best tv value. xfinity x1. simple. easy. awesome. xfinity. the future of awesome. i am mark crumpton with bloomberg's first word news. president trump received a red carpet welcome to india today. the president was greeted on the tarmac by india's prime minister narendra modi. they then traveled to a new cricket stadium packed with cheering crowds. all along the route, performers from across india dance while children and locals line across barricades to wave. during his remarks, mr. trump said the u.s. will sign military deals with india. therney gloria allred says

age of the empowerment of women is here and men like harvey weinstein should not be surprised to face consequences for their actions. i new york jury today convicted weinstein on charges of rape and sexual assault. -- already told journalists outside of the court that she was thrilled with today's guilty verdict because "women were believed." empowermente age of against women. women will not be silenced. they will speak up. they will have their voice, they will stand up and be subjected to your small army of defense attorneys cross-examining them, attempting to discredit them, andliate them, shame them, they will still stand in their truth. a jury five days.

his legal team says he will appeal. at a memorial for her late bryant today, vanessa says the world saw kobe as a basketball legend but to her, he was her best friend and protector. she and kobe talked about how they looked forward to becoming the cool grandparents after their kids had their own grandchildren. kobe bryant, his daughter, and last others work killed month and a helicopter crash. she said her 13-year-old daughter loved basketball so much that she even offered the boys school team advice. she predicted gianna could have become the best player in the wnba. global news 24 hours a day on air and at quicktake by bloomberg, powered by more than

2700 journalists and analysts in over 120 countries. in new york, i am mark crumpton. this is bloomberg. bond investors have been sending the strongest signals yet. they doubt central bankers will be able to revive inflation, that risk off move hardening as the epidemic as spread to more than 30 company -- 30 countries with italy locking down an area of about 50,000 people there milan. institute, manhattan senior fellow. let's talk about the general economic outlook. there was a sense that as long as this was detained within china, there was not going to be a huge global growth impact. the concern now seems to be that you cannot necessarily divorce the u.s. and the rest of the world from what is going on in china.

one, it is spreading internationally. in other see shut down countries. people are starting to get a sense of how global integrated supply chains are. chinese factories shutting down for weeks or maybe even a month can really have repercussions all over. how he wrote a book about people think about risk. from your research into the concept of risk, how do you think about supply chain risk, the counterparty risk of having to be halfway across the world? we saw it obviously pick up the trade war. how do managers in these complex, logistics heavy industries think about this? allison: i was in iowa recently and i ended up sharing an airport shuttle with a bunch of meat producers who get all of their chemicals from china. we talk a lot about diversification.

are hearing a lot of manufacturers thinking about maybe diversifying the supply chain a little bit more. i think there is going to be a big structural change. people realizing how risky it is to be so concentrated in one country. scarlet: talk about meat producers. certainly, they are vulnerable to the concentrated risk. what other industries are particularly vulnerable? allison: we hearing a lot about autos. meet companies say they have a lot in inventory. car manufacturers do not have a lot of inventory. your hearing of car companies in south korea having to shut down their factories because they don't keep my inventory. romaine: the economy has been predicated on this just-in-time inventory for companies to presumably keep cost down for

consumers as well. how do you diversify in a way that some of these consumers are mentioning, without sort of doing away with that sort of just-in-time inventory? allison: you will have to have sources from different countries. especially china. romaine: can you coordinate that when you have parts coming from multiple countries? allison: it is hard. obviously, if everyone has a little bit from china, a little bit from south korea, everybody will look to south korea. at least it is some diversification. joe: after phase one of the trade war, there is a lot of talk, whatever happens, the global economy will look different, globalization will look different. right after the first round of the trade talks ended, it almost seems unfathomable that these

will go back to some pre-trump for free trade war -- pre-trump for free trade war normal. allison: a lot of them just took it for granted that these chemicals will always be available. scarlet: if they can't go to china -- it is one thing if they can still order things but do they need to china physically to get these things done? allison: i don't think they do but it depends. for certain industries, you do. scarlet: the travel part of it is such a big component. but if there are ways around it and if you can diversify your sourcing to elsewhere and keep that physical distance, there might be a way around it just in the meantime. allison: technology has gone a long way where even if you are working remotely in america, you don't have to be in your office. markets selloff today. one thing we heard, this is a big issue.

investors are still sanguine because they know there will be a bunch of stimulus in a lot of places and rate cuts. in your view, is this the kind of setback to which stimulus will be helpful, or will this recovery end up in more l-shaped or u-shaped. allison: it depends how long and deep it is. all stimulus can really do is take the edge off the recession, but it can really prevent it. it depends how deep and prolonged it is. i have a point rate cut will probably not do that much. slowlyeems like it is china, it will probably be sufficient. romaine: monetary policy and fiscal policy can do it, is there anything out there that kind of changes the equation? allison: recessions are usually

caused by external shocks. making it less severe. scarlet: buying time. joe: our thanks to allison s chrager. coming up, corporate fallout in response to the coronavirus outbreak. this is bloomberg. ♪

joe: theoe -- coronavirus continuing to impact globally. speaking earlier with a ceo about the effect the virus is

having. >> from a business standpoint, we have definitely seen that our planes are not as full as they would have been coming out of china. that is something we have the flexibility to move planes in and out. but, the longer that this continues, course is going to have an effect on exports coming out, imports going into china. it does have an effect on our customers, which has an effect on our results. >> over the weekend, you have peter navarro saying they are exporting too much. what is your reaction? how things areds taken out of context. we want to see balance trade. we want to see the imports into the u.s.. we want to see growth. we want exports from the u.s. to

grow. it is so important because 95% of the world's population lives outside of the united states. sonali: you have the coronavirus now shifting to europe also, as well as other geopolitical issues. are you concerned at all about your operations there and how they might be impacted? david: we are monitoring all parts of the world. in europe, it seems like the biggest focus right now is northern italy. asia, you have south korea. youously, places where operate, you are training our people, giving them all the safety precautions they need. then, we follow all laws and authorities as far as where we can operate and where we don't. scarlet: so many world leaders at the g20 in riyadh right now. you are in new york. when you look at how world

leaders, u.s. leaders in particular are tackling the issue of climate change, do you feel like they are doing enough? david: i don't think we can ever say we are doing enough. continuous improvement, we have to do better. the reason we are here is the fact, it is almost like preaching to the choir. andll believe in social environmental responsibility. we meet once per year. i have been going to these meetings since becoming the ceo. it is first to talk to each other. investors meet with that are focused on sustainability issues. scarlet: sustainability is just one aspect of stakeholder capitalism. another aspect is employees. you have been doing a lot of work to automate your workforce and spending a lot on

automation. how does that affect the fabric of your employee base? david: first, nothing is more important to us than our people. are our drivers. our service ambassadors to our customers. that is how important they are. transformation and embracing technology, what we are really doing is being focused on becoming a stronger company. if we continued to grow, then even if you add automation, you are still increasing jobs. at the same time, you are much more efficient. that is the focus of our initiative. romaine: that was should only bostick aching with -- sonali b astak speaking with david abney.

dan lois taken a stake in prudential pnc. just under 5% of prudential shares, making it the company's second largest shareholder. combineill pharmaceutical production into a new company. he will consider the business for a possible ipo. if there is a public listing, sanofi says it would retain about 30%. the u.s. supreme court seems an eight dollars pipeline. some suggest the u.s. forest service acted properly in clearing the natural gas line to cross the appalachian trail. environmental groups say it would create an employee able. -- impermeable barrier. coming up, coronavirus, the latest on the spread. this is bloomberg. ♪

♪ joe: concerns over global growth tightening as coronavirus spreads outside of china. let's bring in bloomberg business -- bloomberg opinion columnist max. one thing that has taken investors by surprise, this new clusters of outbreaks we are seeing in iran, in italy. evenays ago, nobody was talking about these, maybe even four days. how can other countries -- how confident can we be there is not

something bigger already brewing that we have just not cot? -- not caught yet? >> that is one of the things, the potential for asymptomatic spread, this is one of the outbreaks we have seen where there is not a clear chain from china. so far, we have not seen that in the u.s., but without doing broad population-level testing, we are not going to be able to catch those kinds of cases. hopefully we will not get anything to sustained in the u.s., but it is too early to tell. scarlet: it seems like everyone has different parameters and methodologies. what can you really take away from one country saying they comparedmber of cases to another country. >> it seems to change day-to-day in china, whether you have to have a lab confirmed test. in the u.s., the cdc developed

test kits and then found out they were getting inconclusive results. there is always a chance that you have these false negatives and you are sending people out into the world, and then you have sustained transmission. that is when things get really widespread and more scary. romaine: let's talk about that a little bit more. the president of the united states is tweeting, basically saying that the coronavirus is, in his words, very much under control in the usa. he said basically that everyone is working hard and they are very smart. course, the stock market is starting to look very good. let's ignore the last part and focus on it being under control. this seems to be the issue that everyone is scared about. china took containment efforts early on.

it appears to have at least slowed the virus in china. are we going to see the same type of containment measures if at all in other nations like the u.s. or in europe? >> if you don't do that, you are basically resigning yourself to having a new endemic coronavirus in the world. that may end up being what happens. spread iso keep the limited as possible, those are the measures you take the president is correct right now and as far as we know but we are not testing that broadly and conclusively. it is only a few cities that they are starting to bring the tracking mechanisms. we need to get testing more widespread and get these point-of-care diagnostics, rapidly at airports instead of taking a sample, sending into a lab. time going to be a long

for we can conclusively say it is not spreading farther than we know already. romaine: we will keep this conversation going and focus on europe and italy, where the virus could put italy into a recession. let's bring in peter coy, bloomberg businessweek economics editor. italy has always kind of been the wildcard in the european growth story or lack of growth story. we know they have already had containment efforts in what some are saying is the heart of the italian economy, in the northern region, the lombard region. do we have a sense that this will have a material impact? lum bardi alone accounts for 22% of italian gdp. are 50,000 people basically being quarantined in

that area of the lawn. that happens to be 1/10 of one 1% to the1/10 of amount quarantined in china. they were going around a couple of -- a couple of tenths of a percent growth rate. they had a recession. it is quite easy to see this pitching them back into another one. what is bad for italy will be bad for the euro zone as a whole. joe: part of what makes it the borders,is the open -- saying acrossif cases spring up italy, it is hard for others to stop them from the so-called schengen area. the funny thing is, the italian

prime minister is talking about possibly suspending the shanken, yet he is the country with all of the cases. thelet: i am interested in market reaction. obviously, italian stocks fell. selloff of italian funds. no one is looking to go to the safety. onif you look at the yields italian 10 year government debt versus u.s. of the interesting thing is that italian debt is yielding less than the american. yet, what has come down, the u.s. has come down a lot, italy has come up a touch so far. i could easily imagine those lines crossing. convergent, then crossing. if in fact people get or nervous about italy and start to think of it as a credit risk. emphasis is one

slow growth, slow yields. romaine: the other issue going on with europe is this idea that the politics, the government is not necessarily as stable. kind of a fragile coalition. the idea is that any response, what do you get out of it? ther: matteo salvini, from party that had been part of the government, pulled out last year, basically anti-league coalition. andini is attacking that saying that the government has not done enough. he is emphasizing people from africa, totally unrelated. he is hoping this will cause a downfall of the government. scarlet: peter coy, thank you so much for that analysis. coming up, a lot for investors

to chew on. fourth-quarter earnings tomorrow. joe: i will be watching numbers for consumer confidence in february. romaine: live coverage of the latest democratic debate in south carolina tomorrow. this is bloomberg. ♪

to bloomberge markets. in sanily chang francisco, along with paul allen in sydney. risk off mood. u.s. markets tumble along with asia and europe is the coronavirus spreads to more than 30 companies across multiple continents. plus, more cities go into lockdown. the once bustling streets of northern italy go into lockdown. the origin of the infection remains a mystery.